Non-warrantable Condo Loan - Orlando

[Benjamin Boynton]

I have 2 condos as long term investments in the Orlando area, each worth about $75k. Does anyone have any advice on how to do a cash out refinance on non warrantable condos at such a small value? We are looking to continue investing with the cash out but can’t seem to find a lender in central Florida that is willing to work within these restriction.

[Eric Veronica]

@Benjamin Boynton you are correct that a non-warrantable condo means that the condo project does not meet fannie/freddie guidelines.  Florida has more strict rules than every other state in the country.  https://www.fanniemae.com/content/guide/selling/b4...

There are two types of condo reviews, full and limited. The full review requires bylaws, master policy, budget, and a long for condo questionnaire. The limited review usually only requires a short form questionnaire. PDF for both long and short is publicly available if you do a google search. If you are below 70% LTV then you can use the short form. If you are above 70% then you need to use the long form. The long form explicitly asks percentage of renters vs the percentage of owner occupants. If the long form comes back as investor ownership greater than 50% you are sunk. The short form does not ask about the percentage of renters vs owners. So it may very well be possible that this condo will be warrantable at 70%LTV even though it is not at 75%. You may be sunk with the current lender because if they ordered the long form them may not be able to just "un-see" the long form if it is already in the file.

One other important thing to consider. Often times loan officers and owners confuse overall investor concentration vs individual investor concentration. If one individual person or LLC owns more than 20% of the units in a project then the condo will most likely be non-warrantable. This question is asked on both short form and long form questionnaires. Even if the other 80% of units are owner occupied. There are some exceptions for purchases and new projects but that is probably not the case here so I will not go into that. I may have a lender who would consider it if you want to DM me. I will need to check.